Effect of National Leadership Quality, Exports, and Tourism on Economic Growth

Abstract

This study analyses the long-run relationship between economic growth and its determinants, namely national leadership quality, exports of durian, tourism, and capital investment. This study uses Malaysian data that covers the quarterly time series from 2004 to 2019. The unit root tests with structural breaks and the boostrapped multivariate Johansen test for cointegration are used to achieve the objectives of the study. Generally, the findings of this study affirm that the tourism sector, exports of durian, and the quality of leadership are positively associated with economic growth in Malaysia. However, the results of this study also show that uncontrolled exports of durian will jeopardise the contribution of the tourism sector to Malaysia’s economic growth. This study further found that the contribution of the tourism sector to economic growth is contingent upon the level of capital investment. In addition, the findings of this study also found that leadership quality moderates the effects of exports of durian and capital investment on economic growth. Thus, this study concludes that tourism and exports are importance catalysts of growth. However, the effectiveness of the growth catalysts in stimulating economic growth depends on the quality of national leadership. Considering this, outstanding quality in national leadership must be emphasised in an effort to ensure the effectiveness and success of growth catalysts in stimulating economic growth.